Ripple price retested the daily resistance level at $0.626 and failed to overcome it, which is indicative of a bearish price outlook. On-chain data paints a bearish picture for XRP, with a negative OI-weighted funding ratio and a long-to-short ratio below one. A daily candlestick close above $0.626 would invalidate the bearish hypothesis.
Ripple (XRP) price appears to be on the verge of giving back most of its recent gains after retesting and failing to overcome resistance from the daily resistance level on Saturday and dropping by 4.23% in the following two days. At the time of writing, it is trading slightly higher by 1% on Tuesday. Additionally, on-chain data suggests a bearish outlook ahead, as evidenced by a negative OI-weighted funding ratio and a long-to-short ratio below one.
Ripple Price Heads Lower After Retesting Resistance Level: Ripple (XRP) price retested the daily resistance level at $0.626 on Saturday, but was unable to break through. Subsequently, Ripple witnessed a 4.23% decline in the next two days, falling to $0.593. However, the price witnessed a slight recovery on Tuesday, rising by 1% to $0.593.
Near-term Outlook: If Ripple price continues to decline, it could face an 8% decline from its current trading level at $0.593, retesting the daily support level at $0.544. This suggests that the downtrend could continue in the coming days if there is no significant change in the market trends.
If Ripple price closes above the daily resistance level at $0.626, it will lead to a shift in the market structure by creating a higher high on the daily chart, which could lead to a 5.3% rally to revisit the July 31 high at $0.658.
Technical Indicators Analysis
The Relative Strength Index (RSI) and the Awesome Oscillator (AO) on the daily chart are trading near their neutral levels, with the RSI above 50 and the AO above zero. To maintain the bearish momentum, both indicators need to trade below their neutral levels. If these indicators fail to move lower, the downtrend could come under pressure, which could affect the accuracy of the current forecast.
Conclusion: Ripple price analysis suggests that the decline is likely to continue after failing to surpass the resistance level at $0.626. If the price continues to decline, it could drop to the support level at $0.544. Technical indicators continue to show neutral signals, which adds more uncertainty to Ripple’s future direction. It is necessary to closely monitor price action and technical indicators to determine the next trend direction more accurately. The OI-weighted funding rate data is a very important metric for traders and analysts to assess market sentiment and forecast future price movements.
This metric is based on funding rates from futures contracts, which are weighted by their open interest. A positive ratio (longs pushing shorts) typically indicates bullish sentiment, with longs offsetting shorts. Conversely, a negative ratio (average longs pushing longs) indicates bearish sentiment, with shorts offsetting longs.
In the case of XRP, this metric is -0.0084%, reflecting a negative ratio, indicating that short sellers are pushing buyers. This scenario often indicates bearish sentiment in the market, suggesting potential downward pressure on Ripple’s price. Additionally, Coinglass data shows that XRP has a buy-sell ratio of 52.43%. This ratio reflects bearish sentiment in the market, as the figure has a higher proportion of buys and sells than shorts, indicating that more traders are expecting the asset’s price to decline, reinforcing the bearish outlook for Ripple.
Ripple’s on-chain metric shows whales selling
The data shows that XRP investors holding 100 million or more tokens reduced their portfolios by 140 million tokens in a seven-day timeframe between August 19 and 26. When investors with large portfolios dump their holdings, a correction is likely to occur as their greater ability to influence prices increases selling pressure. However, as whales dump their XRP holdings, retail investors have been accumulating altcoins. This is likely one of the factors helping to ease the selling pressure on XRP. The supply distribution chart below shows the change in XRP holdings of investors in different categories.
The Impact of Declining Whale Holdings and Profit-taking on Ripple Price
The Decline in Whale Holdings and Its Impact on Ripple Price: Generally speaking, a decline in whale holdings is associated with a correction in the asset’s price, as shown by previous instances over the past six months. Currently, it remains to be seen whether the recent decline in whale holdings will lead to a sharper correction in Ripple (XRP). Historically, large whale holdings have been an indicator of divergent price trends, with declines tending to signal weakness that could be followed by a price correction.
Network Realized Profit/Loss: The Network Realized Profit/Loss metric indicates that XRP investors are currently choosing to sell the coin for a gain. NPL reflects the net profit or loss of all assets sold on a given day. Positive increases in NPL mean that investors sold for a profit on average, while negative values indicate that traders are making a loss. From August 19 to 26, XRP traders recorded a steady profit of around $35.5 million.
Profit-taking impacts selling pressure: Continued profit-taking typically increases selling pressure on the altcoin, negatively impacting its price. When investors make profits and decide to sell a portion of their holdings.
